Even if you've been filling out Form 1040 and any other associated forms and schedules for years, things will be different this filing season. This is the first year we taxpayers (and tax pros) will be filing under the extensive new Tax Cuts and Jobs Act (TCJA) changes. In addition to new tax rates and deduction amounts, there are a variety of other tax law tweaks that could affect what goes on — or now doesn't — your Form 1040, which itself is new. So before you start working with your tax preparer or open up your tax software, either... Read more →
Armie Hammer and Felicity Jones as Martin and Ruth Bader Ginsburg in the movie "On the Basis of Sex." (Photo courtesy Focus Features) The U.S. Tax Court has gotten some unexpected attention of late for two very different reasons. The fun reason is the movie "On the Basis of Sex." The film is based on a real-life gender discrimination case involving caregiver tax deductions claimed by a man. He is represented by a young and future Supreme Court Justice Ruth Bader Ginsburg and her tax litigator husband Martin Ginsburg. The Ginsburgs won the Tax Court case and the rest is... Read more →
Each year on this federal holiday honoring the Rev. Dr. Martin Luther King Jr., people across the United States volunteer at their favorite nonprofit services provider. Others opt to donate to charitable causes that support the goals of Dr. King and MLK Day. Here's a look at how recent tax law changes have shifted some of those donation choices and giving methods. Charities cheered when they were spared the limitations imposed by the Tax Cuts and Jobs Act (TCJA) on many popular itemized deductions. There even was celebration of a change that allows the charitably inclined, particularly the very wealthy,... Read more →
Most taxpayers every year end up getting refunds. But some folks are at the opposite end of the tax spectrum. They owe Uncle Sam at filing time. And some of those owing taxpayers end up in an even worse situation. Their tax bills are large enough that they also face added penalty charges. This filing season, though, those penalty-paying taxpayers could get a break. Tax underpayment penalty calculations: A tax penalty assessment usually occurs when wage earners don't have enough income tax withheld from paychecks or, if they have other income not subject to withholding, don't pay enough (or any)... Read more →
We're almost 13 months into the largest tax reform measure enacted in more than 30 years and one thing is clear. The Tax Cuts and Jobs Act (TCJA) is in no way tax simplification. In fact, taxpayers and the professionals they pay to help make filing less taxing in every sense of the word have been struggling with just what Congress meant in way too many of the tax bill's hastily drafted provisions. Big business bill, with small biz break and confusion: Although the TCJA contains many changes that will make filing returns this year interesting for individual taxpayers, it... Read more →
As the longest federal government shutdown in U.S. history drags on with no end in sight, furloughed workers are looking at any and all ways to pay their bills. Some have taken hardship withdrawals from their workplace retirement accounts. Thousands of others have applied for unemployment. Few of us can blame folks who are struggling financially for taking these steps. At some point, many of us or our family members and friends have done the same. There's no shame in taking available help when bills you can't pay continue to arrive. And while such actions can help out-of-work folks make... Read more →
The current, and longest-ever, federal government shutdown has made it painfully clear that many of Uncle Sam's employees don't have an emergency savings cushion. They are not alone. A study released last summer found that only about a quarter of all Americans across nearly all ages and generations have no savings whatsoever in an emergency fund. Just more than a quarter of U.S. residents, 29 percent, had saved enough to cover six months' worth of living expenses. When people do save, they tend to do so for retirement. It's not necessarily that they're looking ahead to their golden years. Rather,... Read more →
IRS headquarters image by Kari Bluff via Flickr Creative Commons The Internal Revenue Service has some good news for taxpayers and sort of good news for its staff. The agency is calling back more than half — specifically, 46,052 or almost 55 percent of its more than 80, 265 — employees. These are workers who, according to the updated government shutdown contingency plan issued Jan. 15 by the Treasury Department, are necessary for the IRS "to continue return processing activities to the extent necessary to protect Government property, which includes tax revenue, and maintain the integrity of the federal tax... Read more →
Even in the best of tax times, folks are impatient when it comes to getting their refunds. They want them yesterday, looking to collect on the forces savings account they created when they intentionally had too much put into their paycheck withholding. Then comes 2019, where every day it's looking more like parts of the federal government, including the Internal Revenue Service, will be in shutdown mode when the annual tax return filing season starts on Jan. 28. While the Treasury Department and IRS say they will do what it takes to make this year as normal as possible, many... Read more →
Internal Revenue Service offices nationwide, like this one in New York City, are closed due to the ongoing federal government shutdown. (Photo by Matthew Bisanz via Wikipedia Commons) Most of us don't have personal interactions with the Internal Revenue Service. We simply do our taxes every year, send them to the federal tax collector and move on with our lives. It's a different story in many places across the country. Those places have physical IRS offices where friends and family usually go each weekday to do their jobs. They want the government shutdown shut down so they can get back... Read more →
Longest U.S. federal government shutdown in history be damned! That's apparently the Internal Revenue Service's motto this year. It announced last week that it will start working on our 2018 tax returns — and issue any related refunds — this filing season, which is set to start on Monday, Jan. 28, even if it's technically still operating in modified shutdown mode. The IRS underscored that commitment on Friday, Jan. 11, when it announced that taxpayers who qualify to use Free File can now access the online no-cost tax preparation and e-filing option. Yep. Free File 2019 is now open for... Read more →
Twenty-two Thirty-four days and counting (updated Jan. 24, 2019). We now are in the midst of the longest federal government shutdown in U.S. history. National park properties, such as the National Mall west of the U.S. Capitol, are among the federal operations and services that shut their doors when funding runs out.. (Photo by Emw via Wikimedia) On Friday, Jan. 11, hundreds of thousands of federal workers across the country got their first paychecks of 2019. They all received the same amount $0.00. In addition to not getting paid, which poses the obvious problems for federal workers, many will face... Read more →
Today should be payday for hundreds of thousands of federal government workers. The partial government shutdown, however, means they're not getting their money. And even though the White House, Treasury and the Internal Revenue Service say that the 2019 filing season will open at the end of January as it has in years past and that refunds will be issued, there's no guarantee that things will go smoothly. We are, after all, talking about Uncle Sam's operations. Can IRS meet refund challenge? The IRS says it will recall "a significant portion" of its currently furloughed workforce to open tax season... Read more →
The Internal Revenue Service still is mostly closed due to the Capitol Hill impasse over how to fund the federal government. Just a relative handful of employees are in a few IRS offices, doing what have been deemed essential jobs, but not getting paid for their work. Some of the agency's online operations, however, are up and running. And other IRS services, particularly those that are funding in part by fees, could be restarted despite the closure of many of Uncle Sam's offices. In fact, one of those, the Income Verification Express Service (IVES) program, was restarted this week (more... Read more →
Jeff and MacKenzie Bezos are getting a divorce. I know, it's hard to feel too bad for folks who are so wealthy. They tend to come through difficult circumstances quite well. But the joint announcement today (on Twitter, of course) from the world's richest man and his soon-to-be ex-wife got me thinking about, of course, taxes. By making the decision to end their marriage in 2019, Bezos is losing a tax break while Mrs. Bezos is getting one. As I said, I'm sure neither Mr. or Mrs. Bezos won't suffer too much. Both he and his wife will have lots... Read more →
Tax filing time! (Photo by MoneyBlogNewz via Flickr) The Internal Revenue Service will begin processing 2018 tax returns on Jan. 28. That's essentially the same the time, the last Monday of the month, that filing season started last year. Free File, the partnership between the IRS and the tax software industry, has in the past opened at least a few days earlier (it was available on Jan. 12 last year), but there's no word on that 2019 no-cost online tax prep and filing option yet. But one thing the IRS did make clear is its commitment to the Jan. 28... Read more →
Good news today for folks who are expecting a tax refund when they file their 2018 returns this year. You'll get your money, even if the partial government shutdown drags out into the 2019 tax filing season. That's the word from the Office of Management and Budget (OMB), according to Hallie Jackson, chief White House correspondent for MSNBC. Jackson made that announcement during Ali Velshi's show this afternoon after leaving an hour-plus White House press briefing, led by Vice President Mike Pence, on the shutdown. "The head of Office of Management and Budget, Russ Vought, is telling us that there... Read more →